Interpretation of Revenue Statutes: Export Incentives

Abstract

Does a cooked flounder or sole packed in a plastic bag constitute a “prepared fish dinner” or “prepared consumer fish pack” for the purposes of the Income Tax Act 1976? In Taspac Seafoods Ltd. v. Commissioner of Inland Revenue (1983) 6 NZTC 61,636, 6 TRNZ 513, Justice Barker found that similarly packaged lobsters destined for restaurants constituted a “prepared consumer fish pack”. Thus Taspac qualified for a tax incentive to increase exports. This note is on the similar case of Commissioner of Inland Revenue v. United Fisheries Ltd (No 2) (1983) 6 NZTC 61,572; 6 TRNZ 266 (HC) where Holland J found the opposite result.

On appeal, (1985) 7 NZTC 5,005; 8 TRNZ 365, the Court of Appeal restored the judgment of the Tax Review Authority that the fish was a “prepared fish dinner”, on the basis that it was a question of fact that Holland J was not entitled to disturb. Richardson J in the Court of Appeal held that Taspac was not a good authority as Barker J had interpreted “prepared consumer fish pack” too broadly.

As at 2009, most export incentives, including the ones discussed in this note, have been removed from the Income Tax Act 2007.

Keywords: Export incentives, revenue statute, statutory interpretation, tax law, Taspac, United Fisheries Limited

JEL Classification: K34